ROC reports 81% increase in year end net profit

February 04, 2020

IronRock Insurance Company Limited (ROC), for the year ended December 31, 2019 posted gross premiums of $701.42 million relative $571.84 million; representing a 23% increase. Fourth quarter gross premium amounted to $226.81 million, a 19% increase when compared to $190.33 million for the corresponding quarter of 2018.

Change in gross provision for unearned premiums amounted to $71.21 million compared to $42.11 million in 2018. As a result, gross insurance premium revenue amounted to $630.21 million relative to $529.73 million in 2018, a 19% increase year over year. For the quarter, gross insurance premium revenue rose 19% to $475.30 million (2018: $399.79 million).

Written premiums ceded to reinsurers totaled $455.58 million for the year ended December 31, 2019 ( 2018: $356.84 million). However, reinsurers’ share of change in provision for unearned premiums amounted to $47.24 million for the twelve months ended December 31, 2019 (2018: $11.33 million).

Commission expense incurred totaled $75.25 million in contrast to 2018’s $60.02 million, while commission income grew by 30% from $66.31 million in 2018 to total $86.25 million for the year ended December 31, 2019.

In addition, the company booked net claims of $133.43 million relative to $72.39 million in 2018 for the year. The Company noted that the increase in claims expense is, “due primarily to increased Motor claims.”

Operating expenses, for the year ended December 31, 2019, increased to $163.62 million relative to $160.10 million in the prior year. As such, underwriting loss worsened over the year closing at $64.17 million versus a loss of $41.98 million in 2018. Moreover, for the fourth quarter, underwriting profit was $3.52 million (2018: $847,000).

Investment income increased from $32.22 million in 2018 to $38.71 million for 2019. Gain on sale of investment amounted to $27.57 million compared to $3.16 million in 2018. Foreign exchange gain amounted to $2.88 million compared to a FX gain of $8.37 million in 2018, while other income fell to $32,000 (2018: $1 million).

As a result, profit for the year totaled $5.01 million compared to a profit of $2.77 million in 2018, an 81% improvement year over year. For the fourth quarter, the company booked profits amounting to $14.63 million relative to a profit of $10.33 million reported in 2018, an improvement of 42% year over year.

Total comprehensive income for the year amounted to $34.67 million for the year December 31, 2019 compared to $2.37 million in 2018.

Earnings per share for the year totaled $0.02 (2018: EPS: $0.01); while EPS for the quarter was $0.07 (2018: $0.05). The numbers of shares used in the calculations are 214,000,000 units. The stock price as at March 31, 2020 was $3.00.

Balance Sheet Highlights:

As December 31, 2019, assets totaled $1.27 billion (2018: $1.01 million) increasing by 26% year over year. Investments contributed to this increase in the asset base by 55% increasing from $434.59 million in 2018 to $672.92 million in 2019. Cash and Cash equivalents and Reinsurance assets also contributed to the rise with increases of 70% and 27% to end the year at $104.14 million (2018: $61.16 million) and $223.98 million (2018: $176.75 million) respectively.

Shareholder’s equity closed at $549.38 million (2018: $514.71 million). This resulted in a book value per share of $2.57 (2018: $2.41).

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